How the hourly rate calculator works in Australia
Why the simple salary ÷ hours formula fails
Dividing your target salary by 2,080 hours (40 × 52) assumes every hour is billable and you never take time off. Neither is true. The result is a rate that quietly loses you money every week.
What billable ratio means
Your billable ratio is the share of your working week you can actually invoice. Quoting, emailing, travelling, invoicing, chasing payments and admin all eat into it. Most sole traders bill 50–65% of a standard work week.
How overheads compound on your rate
Insurance, software, accountant fees, tools, vehicle and phone aren't optional — they come off the top before you take home a cent. Spread across only your billable hours, they often add $10–$30/hr to your true rate.
Why GST is not your money
If you're registered for GST you collect 10% on top of your rate and pass it to the ATO. Quote ex-GST internally and add it to invoices. Never plan your income around GST-inclusive figures.
Why super belongs in your rate
As a sole trader, no employer pays super for you. If you want a retirement, build at least 12% of your target income into your rate and pay it into super yourself.
Break-even rate vs target rate
Your break-even rate is what you must charge just to cover overheads — at this rate you earn $0 of income. Your target rate covers overheads, income and super. Never confuse the two.
Disclaimer: This tool provides general information only and is not financial, tax or legal advice. For advice specific to your situation, speak to a registered tax agent or accountant.